- Cleo Capital announced that it raised $3.5 million to invest in female scouts who are looking for emerging businesses to invest in.
Sarah Kunst has just closed a $3.5 million fund through Cleo Capital that is targeted towards finding emerging women-led businesses. Cleo Capital is going to invest in female scouts, who are going to independently seek deal flow.
Scouts are known for working with large venture capital firms to find emerging startups at a very early stage. Last year, Kunst worked with Sequoia Capital as a scout so she knows the ins and outs of that model.
The investors in this fund include Away co-founder Jen Rubio, Lightspeed Venture Partners’ Nicole Quinn, and Bumble Fund. The reason why Kunst is targeting female scouts is due to the low percentage of funding that goes towards women-led businesses.
Cleo Capital is also going to use the fund for follow-on rounds flowing from scout investments. And she will also invest in companies that may not be geared towards scouts.
While the scouts will be female, the businesses that they find do not necessarily have to be women-led. This way it casts a wider net of finding the best deals.
“I’m not going to put a bunch of random restrictions on you, you’re brilliant, you’re smart and I’m going to trust you with that,” said Kunst via Crunchbase News. “They can invest in whoever they want.”
With the fund, Kunst is expecting each scout for making around five investments each. However, this number may be subject to change as some industries are more capital intensive. One of the scouts that was recruited already is Birchbox co-founder Mollie Chen. Plus Kunst is also looking for scouts in Denver, Detroit, and several other locations.
Andrea (Lamari) Walne of Manhattan Venture Partners had also told Crunchbase that “there’s no one better suited than Sarah to utilize the network effects of the strongest females in the Valley to identify untapped, female-led opportunities.”
Kunst pointed out that this is the second-largest fund closed by a black female venture capitalist in America.
“Super happy to be that number two,” Kunst added via Crunchbase. “And I hope I get replaced soon with someone who has raised a much bigger one.”